Observations focused on the problems of an underdeveloped country, Venezuela, with some serendipity about the world (orchids, techs, science, investments, politics) at large. A famous Venezuelan, Juan Pablo Perez Alfonzo, referred to oil as the devil's excrement. For countries, easy wealth appears indeed to be the sure path to failure. Venezuela might be a clear example of that.

Archive for December 8th, 2006

Looking at the country’s oil production, one can also get regional data from the latest PDVSA report, as shown below. As you can see, PDVSA’s production from both the Western part of the nation (Zulia) and the southern part (Barinas Apure) is still down significantly from the levels of 2001, with Zulia Basin production down 330,000 barrels a day and Barinas Apure by some 20,000 barrels a day. In Zulia, where most of the oil is light, the problem is that most wells are old and need investment to keep production up, which PDVSA has not done. In the Eastern part of the Nation, production has been recovered but as we will see in a future graph, there is a very high cost that will be paid some day, due to the irresponsibility of the Roja, Rojita leaders who talk about sovereignty out of their mouths, while destroying it with their actions.Production of crude oil in thousands of barrels in the three different regions of the country for the last five years.

No sooner were the electoral results over that the Government introduced a bunch of new controls and regulations on the economy with decrees on Thursday:

–The Government regulated the prices of 47 items used in construction, including sand, doors, steel rod and others. Most of the “new” prices are below those in the marketplace before the decree was issued.

–The Government introduce a customs surcharge of 15% on luxury such as scotch, hard licquor, yachts, boats, candles and toilet paper.

–The Government introduce a new requirement for the import of goods and receiving foreign currency from the foreign exchange office for some 5,500 products. This is the “Certificate of non-production” A certification that the item being imported is not produced in Venezuela. It pubished a list of 5,500 items which will require it and 3,500 that will not. Sounds like a new source of business for the boli burgeois, since those products needing this before were in a short list.

–It also introduced a decree, which I haven’t read yet, but it seems like it reserves the import of certain things to cooperatives, small business and social companies

And here is the graph showing PDVSA’s Heavy, medium and light oil production. As you can see the country lost almost half a million barrels of production of the highest quality oil (the one with the highest margins too) the country has under the roja, rojita administration. I guess it is a strange concept of sovereignty this revolution has. . The chart plots oil production by PDVSA for each caetgory of oil produced. The red line is light crude, the blue is medium crudes and the orange is heavy crudes.